Chipotle Mexican Grill Inc. (NYSE: CMG) has been trying to figure out where it stands in 2017. The burrito chain has seemingly moved past its immediate E. coli issues, but the lingering stigma and weak numbers have been detrimental to the business. Even in the past month, Chipotle shares have hit lows they haven’t seen since 2013.
New directives and sanitary practices are in place to prevent these troubles from happening again, but investors still don’t seem to be hungry yet. Analysts are continuing their negative outlooks on Chipotle.
Just last week, Chipotle announced the preliminary results for its fourth quarter, which although disappointing, proved to be a boost to shares. The point behind this increase was that as bad as comparable sales were, comps were improving as opposed to getting worse.
In an effort to change the overall sentiment toward the company, Chipotle has selected two new agency partners. Venables Bell & Partners will take on advertising duties and MullenLowe Mediahub was selected for media planning and buying. The decision comes at the end of a four-month agency review that included consideration of nearly 20 potential agency partners.
For some quick background: Venables Bell is a San Francisco-based agency that has won accolades for its work for client companies such as Audi, REI and Intel, and it was named breakthrough agency of the year in 2016 by AdWeek magazine. Boston-based Mediahub is the global media planning and buying arm of MullenLowe Group, and it represents a variety of progressive brands, including JetBlue, Netflix, Bose and Shinola. Mediahub was named 2016 Creative Media Agency of the Year by Mediapost.
Mark Crumpacker, chief marketing and development officer at Chipotle, commented:
After considering some extremely talented agencies, we decided that retaining two best in class partners to work with us on the advertising and media roles gave us the best combination of talent to help us as we continue to evolve our marketing programs. Venables impressed us from the beginning with their insights and ability to translate our strategy into really compelling advertising, while Mediahub demonstrated extraordinary analytic and media targeting capabilities. Working together with our internal marketing team and these new agency partners positions us well to improve the impact of our marketing programs over the coming months.
Shares of Chipotle were trading down about 0.6% at $407.36 on Thursday, with a consensus analyst price target of $392.41 and a 52-week trading range of $352.96 to $542.50.
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